Mubadala Energy would be more than happy to supply all the natural gas to be produced from its south Andaman block for Indonesia's domestic consumption at the right price, a senior executive said on Wednesday.
Indonesia wants gas producers to increase supplies to domestic users as demand is rising. However, producers mostly prioritise exports of liquefied natural gas and have asked the government to review price caps on domestic gas, arguing that it does not make good business sense when spot prices for LNG are so much higher.
Abdulla Bu Ali, president director of Mubadala Energy Indonesia, told reporters on the sidelines of the Indonesia Petroleum Association conference, that the company was looking at both exports and selling to Indonesia.
He said domestic gas prices had to be competitive but declined to give a specific number.
The United Arab Emirates explorer expects to start gas production at Tangkulo-1 in its south Andaman block in late 2028. On Tuesday, it signed an initial agreement to supply gas to state fertiliser maker Pupuk Indonesia.
Indonesia caps domestic gas prices for certain industries and power plants at $6.50-$7 per million British thermal units (mmBtu). Spot LNG prices in Asia LNG-AS were at $11.75 per mmBtu last week.
(Reuters - Reporting by Dewi Kurniawati and Bernadette Christina; Writing by Florence Tan; Editing by Edwina Gibbs)